Business minister Jamie Hepburn revealed that cash retentions in the construction industry will be among the issues considered as part of a consultation planned in spring 2019.

SEC Group Scotland, which represents the largest sector by value in Scotland’s construction industry, has been campaigning for many years to end the retentions abuse.

Chairman Eddie Myles said he was delighted that the Scottish Government had decided to act on this issue.

He added: “This announcement follows representations made by SEC Group Scotland at a meeting of the Cross-Party Group in the Scottish Parliament attended by the Business Minister.  He was urged to act now rather than wait for any solution promulgated by the UK Government which could take four or five years to come to fruition.”

Alan Wilson, SEC Group’s national executive officer, said that the Scottish Government had already been presented with a solution by the co-chairmen of the Review of Public Sector Construction Procurement whose report was published over five years ago.

He said: “The Review recommended that retention monies should be ring-fenced in a trust fund akin to the status accorded to monies held in project bank accounts.  We expect the consultation to invite responses on this option.”

Alan Brown, SNP Member of Parliament for Kilmarnock and Loudoun, who has been campaigning in the UK Parliament for reform of the system, said he was very pleased with this development.

He added: “The Scottish Government is lighter of foot than the UK Government which is over-preoccupied with Brexit. I’d like to see Scottish Government legislate within the next couple of years to protect cash retentions. This would help to transform the prospects of every small business in Scotland’s construction industry.”

Announcing the consultation, Jamie Hepburn MSP said: “Cash retention in construction industry contracts is common practice, including in the public sector. Its purpose is to ensure the contractor completes the job. However, it must be used proportionately and responsibly. The Scottish Government believes in fair and transparent working practices and a culture that supports prompt payment is essential to secure investment and jobs. Having listened to the construction industry’s concerns, a public consultation on the use of retentions in construction contracts will take place in spring next year.

“The Economic Action Plan sets out our intention to step up our engagement with the construction sector to support its plans to develop and grow a more sustainable, productive and innovative industry. This consultation is just one part of that.”